US employers slow down recruitment ahead of holiday shopping

US businesses are hiring fewer seasonal workers this holiday shopping season as stubborn inflation hurts retail sales prospects.

According to the job site Indeed, employers posted 8.2% fewer jobs during the holidays this year than they did last year. The decline comes even after Indeed reported that searches for seasonal jobs were up 33 percent this year compared to 2021, to the highest level since 2019.

Macy’s and Walmart said they plan to hire 1,000 fewer vacationers than they did last year. walmartwhich added 40,000 people this season compared to 150,000 in the same period last year, said that because it was actively recruiting earlier this year, “the workforce this holiday season is stronger than last year.”

FedEx’s Chief Account Officer, Brie Carere, said the company is also reducing the number of employees over the holidays and expects to handle less parcels this year.

The National Retail Federation, a trade group, expects retailers to hire 450,000 to 600,000 seasonal workers this winter, up from 669,800 in 2021. applicants for seasonal positions compared to the previous year.

“Given the shrinking vacancies and the growing interest from job seekers, it seems like there is a bit less bargaining power on the workers side,” said Corey Stahle, Indeed Economist. “The labor market is starting to cool off a bit compared to last year.”

A year ago, retail employers faced severe labor shortages while consumers who had built up savings during the coronavirus pandemic opened their wallets. But only employment has since increased, indicating a lower need for temporary workers. In October, government statisticians counted 15.8 million retail workers, up 1.9% from 15.5 million in the same month of 2021.

FedEx employee loading packages into an airplane container
FedEx is cutting furlough workers as it expects to handle fewer packages © Charly Triballeau/AFP/Getty Images

The National Retail Federation also predicts a slowdown in spending growth, forecasting holiday retail sales to grow 6-8 percent year-on-year to $943 billion to $960 billion in 2022. This will exceed the average growth rates observed over the past decade. but would still be below the 13.5 percent jump seen in 2021.

Given that consumer prices rose 7.7% year-on-year in October, it can also be assumed that the improvement in key retail sales figures is barely keeping up with inflation.

Increasing competition for remaining vacancies has allowed companies to forego recruitment bonuses and other incentives to attract candidates. Retail wage growth slowed to 5.1% year-on-year in September from 7.4% in January.

As the labor market begins to soften, fewer American workers are quitting: 4.1 million quit in September, down 10 percent from a November 2021 peak of 4.5 million.

Michael Alexis is among the employers looking to hire less this holiday season. Last winter, he hired 108 temporary workers, more than doubling the workforce for his corporate events company, Teambuilding.com. The demand for virtual holiday parties has been huge, he said.

But this year, he only needs 75 people, and it’s been easier for his recruiters to find them. “The market seems to be more interested in our flexible, remote work positions,” Alexis said.

While seasonal hiring may have slowed down, it hasn’t stopped. Like last year, Amazon announced plans to hire 150,000 people with an average starting pay of $18 an hour and signup bonuses of up to $3,000.

Macerich, the mall operator, has organized job fairs around the country to find workers for maintenance and security, as well as for its retail tenants.

“Pressure [to find workers] feel a little better,” said Olivia Lee, executive vice president of Macerich. “It’s not that the pressure isn’t there, it’s just that it’s not as acute as maybe six months ago because we’re seeing part of the job market coming back.”

This month, UPS, the package delivery group, held a job fair in Long Island, New York. Head of Human Resources Jason Pimentel said that even after making hundreds of job offers on site, he still had about 200 positions left at his facility alone.

“It’s a tough job market. It may have cooled off a bit, but the job market is still very tight,” said Matt Lavery, Director of Talent Acquisition at UPS. “He’s changed a few degrees. It was 700 degrees Fahrenheit, and now it could be around 650 degrees Fahrenheit.”

Isaiah Rhodes was among the applicants who came to the UPS event. He said he was hired after he unsuccessfully applied for a job at Best Buy and Nike stores.

“Until today, it’s been hard for me because I don’t have any experience,” Rhodes said.

Supplementary report by Andrew Edgecliffe-Johnson in New York